Coach's results top analysts' expectations as sales rise
NEW YORK -Coach Inc. (COH) is cutting more than 300 jobs worldwide and is overhauling its management, as it looks to keep its turnaround efforts on track.
The job cuts represent about a 10 percent reduction in its global corporate staff, or about a 2 percent pruning in its total workforce.
Coach said that Gebhard Rainer, president and chief operating officer, and David Duplantis, president of global marketing, digital and customer service, will be leaving the company. With the departures, Coach has promoted Andre Cohen to president of North America and global marketing. He is adding North America wholesale as well as global marketing, customer experience and digital to his duties. Todd Kahn will be president, chief administrative officer and secretary and will expand his scope to include IT, supply chain, global environments and procurement.
The moves come as the upscale handbag and accessories company reported on Tuesday that its fiscal third-quarter profit results beat analysts' estimates as sales improved in North America and overseas.
"These actions will allow us to emerge as a brand-led company with fewer layers, larger spans of responsibility and a consistent global voice across merchandising and marketing," said Victor Luis, CEO in a statement.
Coach has struggled with a sales slump for several years as its brand lost its edge with shoppers. Now, the company is trying to remake the business more upscale. The company purchased luxury shoe maker Stuart Weitzman last year. In February, it grabbed the fashion crowd's attention with its luxury collection called Coach 1941, which made its debut in stores that month.
The luxury handbag maker earned $112.5 million, or 40 cents per share, for the three months ended March 26. That compares with $88.1 million, or 32 cents per share, a year ago.
Earnings, adjusted for non-recurring costs and costs related to mergers and acquisitions, came to 44 cents per share. This beat the 41 cents per share analysts surveyed by Zacks Investment Research expected.
Revenue for the New York-based company climbed to $1.03 billion from $929.3 million, topping the $1.02 billion that Zacks' analysts predicted.
Coach Inc. said Tuesday that international sales increased 5 percent, while North American sales edged up 1 percent.
The company expects that it will see growth in revenue at stores opened at least a year for the fourth quarter for its North American business. For the latest quarter, that metric was flat.
Its shares rose more than 3 percent, or $1.34, to $41.53 in late morning trading.